Comparing degrees of inequality aversion
AbstractWe propose a straightforward dominance procedure for comparing social welfare orderings (SWOs) with respect to the degree of inequality aversion they express. We consider three versions of the procedure: (i) a criterion based on the Lorenz quasi-ordering which we argue to be the ideal version, (ii) a criterion based on a minimalist concept of inequality, and (iii) a criterion based on the relative differentials quasi-ordering. It turns out that the traditional Arrow-Pratt approach is equivalent to the latter two criteria for important classes of SWOs, but that it is profoundly inconsistent with the Lorenz-based criterion. With respect to the problem of combining extreme inequality aversion and monotonicity, criteria (ii) and (iii) identify as extremely inequality averse a set of SWOs that includes leximin as a special case, whereas the Lorenz-based criterion concludes that extreme inequality aversion and monotonicity are incompatible.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces0517.
Date of creation: Mar 2005
Date of revision:
Inequality Aversion; Lorenz; Leximin; Maximin; Risk Aversion;
Other versions of this item:
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alain Chateauneuf & Patrick Moyes, 2005.
"Lorenz non-consistent welfare and inequality measurement,"
Journal of Economic Inequality,
Springer, vol. 2(2), pages 61-87, January.
- Alain Chateauneuf & Patrick Moyes, 2004. "Lorenz non-consistent welfare and inequality measurement," Journal of Economic Inequality, Springer, vol. 2(2), pages 61-87, August.
- Alain Chateauneuf & Patrick Moyes, 2004. "Lorenz Non-Consistent Welfare and Inequality Measurement," IDEP Working Papers 0406, Institut d'economie publique (IDEP), Marseille, France, revised May 2004.
- Tungodden, Bertil, 2000.
"Egalitarianism: Is Leximin the Only Option?,"
Economics and Philosophy,
Cambridge University Press, vol. 16(02), pages 229-245, October.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
- Bosmans Kristof, 2012. "Distribution-sensitivity of rank-dependent poverty measures," Research Memoranda 034, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
- Yoram Amiel & Frank A Cowell & Wulf Gaertner, 2007.
"Distributional Orderings: An Approach with Seven Flavours,"
STICERD - Distributional Analysis Research Programme Papers
93, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Yoram Amiel & Frank Cowell & Wulf Gaertner, 2012. "Distributional orderings: an approach with seven flavors," Theory and Decision, Springer, vol. 73(3), pages 381-399, September.
- Antoine Bommier & François Le Grand, 2013.
"A Robust Approach to Risk Aversion,"
CER-ETH Economics working paper series
13/172, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Antoine Bommier & Stéphane Zuber, 2012.
"The Pareto Principle Of Optimal Inequality,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 593-608, 05.
- Bommier, Antoine & Zuber, Stéphane, 2009. "The Pareto Principle of Optimal Inequality," TSE Working Papers 09-132, Toulouse School of Economics (TSE).
- BOMMIER, Antoine & ZUBER, Stéphane, 2009. "The Pareto principle of optimal inequality," CORE Discussion Papers 2009009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Kristof Bosmans, 2006.
"Extreme inequality aversion without separability,"
Public Economics Working Paper Series
extrin, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karla Vander Weyden).
If references are entirely missing, you can add them using this form.